European stocks fell and US equity futures pared earlier gains as disappointing corporate earnings weighed on sentiment.
Europe’s Stoxx 600 index dropped 0.4%, with most sectors in the red. Hugo Boss slumped 11% after cutting its profit guidance in the face of weaker demand for high-end fashion. Miners were the worst-performing industry group, as Rio Tinto Group declined after giving disappointing guidance on its copper operations. Contracts for the S&P 500 were steady.
Investors are looking forward to US retail sales data due later for potential insights on Federal Reserve interest rates. Fed Chair Jerome Powell said Monday that inflation is heading toward the central bank’s 2% goal. Results from Morgan Stanley and Bank of America Corp. will also influence the mood in markets after fellow banking giant Goldman Sachs Group Inc. reported a surge in earnings Monday.
The dollar strengthened against most of its Group-of-10 peers, with trading driven by speculation that Donald Trump is in a stronger position to win the US presidential election. The yen declined against the greenback on wagers that the Japanese currency will remain weak during a second Trump term. Treasury yields ticked lower ahead of the retail sales print.
“Current expectations are pointing to a more subdued state for US consumers, with June retail sales to turn in flat month-on-month, down from previous 0.1%,” wrote Jun Rong Yeap, a market strategist at IG Asia Pte. “That may continue to reinforce market expectations for a September rate cut from the Fed.”
Meanwhile, the MSCI AC Asia Pacific index headed for a third day of losses. Stocks in Hong Kong declined the most in the region, while some stocks in China traded lower as Trump’s selection of JD Vance
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